Introduction
In the ever-changing world of franchised coffee, one name stands out above the rest: Starbucks. But what many people don’t know is that Starbucks also owns Green Mountain Coffee Roasters, one of the most popular brands of specialty coffees. Does Starbucks really own Green Mountain Coffee, and if so, what does that mean for both companies? In this article, we’ll explore the relationship between Starbucks and Green Mountain Coffee Roasters, offering insight into the implications this has for consumers and the specialty coffee industry as a whole.
History of Green Mountain Coffee Roasters
Green Mountain Coffee Roasters, founded in 1981, is a specialty coffee roaster and one of the most popular coffee brands in the United States. In 2016, Green Mountain Coffee was acquired by Starbucks for a reported $13.9 billion, after a decade of increasing profitability for the small roaster. Prior to this acquisition, Green Mountain Coffee was a publicly traded company on the NASDAQ.
The Deal and Its Impact
Despite the staggering sum Starbucks paid for Green Mountain Coffee, the sale had the potential to be hugely beneficial for both companies. As a result of the deal, Starbucks was able to add the well-known brand to its roster and benefit from the already-established customer base. Additionally, the expanded distribution capabilities of Starbucks meant that Green Mountain Coffee Roasters gained access to a wider range of potential customers.
Green Mountain Coffee also saw a boost in brand recognition. Consumers now had easy access to the much-beloved coffee shop using the Starbucks app, allowing them to make their favorite drinks and selections from the comfort of their own home or office.
The Advantages of the Deal for Starbucks customers
As a direct result of the Starbucks-Green Mountain Coffee deal, Starbucks customers saw a vast expansion of their selection. Not only were customers now able to enjoy the classic Starbucks options, they could also experience the more adventurous flavor profiles of Green Mountain Coffee Roasters. Customers now had a wide range of choices in terms of their favorite coffee blend, specialty drinks, and even their K-Cup selections.
Disadvantages for Independent Coffee Shops
With the Starbucks name attached to Green Mountain Coffee, many independent coffee shops saw a decline in business due to the chain’s increased reach. Customers were now able to get their favorite Green Mountain Coffee Roasters product without having to even leave the house. Increasingly, consumers have been opting for the convenience of on-demand coffee delivery rather than making the trip to an independent shop.
The Impact on the Coffee Industry
The Starbucks-Green Mountain Coffee deal had a considerable impact on the specialty coffee industry as a whole. While there were some benefits, such as an increase in flavor options for consumers, the decline of independent coffee shops was a major disadvantage. The increased market power of Starbucks, combined with the already-dominant presence of other players in the industry, meant that small, independent roasters were increasingly squeezed out of the market.
Starbucks Keurig Machine
The acquisition of Green Mountain Coffee Roasters has allowed Starbucks to enter the K-Cup market, a strategic entry that has allowed the company to tap into more convenience-oriented customers who are willing to pay a premium for their coffee. The Starbucks K-Cups come in a variety of flavors and can be enjoyed in the comfort of your own home. While the K-Cups are more expensive than other available options, customers are willing to pay for the quality and convenience that come along with this product.
Environmental Impact and Sustainability
Sustainability is a major issue in the coffee industry, and Starbucks has made an effort to reduce its environmental impact by investing in a greener approach to its supply chain. The company has committed to increasing its focus on responsible sourcing, with plans to source 100% of its coffee from certified sustainable growers by 2020. Green Mountain Coffee was already committed to producing high-quality and sustainably produced coffee, and its acquisition by Starbucks allowed the company to increase its focus on this area of production.
After the Starbucks-Green Mountain Coffee deal, Starbucks has further consolidated its position as a leader in the specialty coffee market, with the company now controlling a large portion of the market share. Starbucks, combined with other large national and international chains, has made it increasingly difficult for independent coffee shops and small roasters to compete. With its increased reach, Starbucks has made it difficult for these smaller companies to compete, leaving many to face an uncertain future.
Conclusion on Starbucks and Green Mountain Coffee
The Starbucks-Green Mountain Coffee is an example of how large companies can acquire smaller ones in order to gain a competitive edge in the market. While there are some advantages to this deal, the environmental impact and the potential for the squeeze out of smaller players in the industry are definitely issues that need to be monitored going forward. In the end, this deal is a reminder of the ever-changing world of franchised coffee, one that can be both exciting and challenging.
